Oil marketing companies held back the increase in the prices of petrol and diesel on Monday much to the relief of consumers who have faced consistent increase in auto fuel prices in the past week.
With this, diesel prices continue to remain at 72.42 a litre in Delhi while petrol prices remain unchanged at Rs 82.34 per litre in the national capital. In other cities too, the price stayed at Sunday’s level.
Oil marketing companies had raised the price of petrol by 21 paise and diesel prices by 29 paise per litre on Sunday. Before this, fuel prices increased in nine out of the last 10 days starting from November 20.
In the past 10 days petrol prices have now risen by Rs 1.28 per litre and diesel by Rs 1.96 a litre. The increase has been primarily on account of firming up of global oil and product prices following news of a successful coronavirus vaccine.
Petrol prices had been static since September 22, and diesel rates hadn’t changed since October 2.
Though retail pricing of petrol and diesel has been deregulated and oil marketing companies were following a daily price revision formula, the same was suspended for almost two months to prevent volatility in international oil markets from impacting fuel prices regularly during the pandemic.
But with crude on the boil again on news of a successful coronavirus vaccine launch soon, the patience was lost by OMCs who finally resorted to price increase to cover for their under recovery on the sale of two petroleum products.
The benchmark Brent crude has crossed $48 a barrel on Intercontinental Exchange (ICE) lately but is now hovering a tad lower at around $47 a barrel. It has remained over $ 44 a barrel for most part of November.
OMCs need almost 40 paise per litre increase in retail price of petrol and diesel to cover for $ 1 increase in crude. Going by this yardstick, product prices would have to be increased by up to Rs 2 per litre to cover under recovery on its sale.